A Company Decides to Close Down Its Plastics Division

question 76

Multiple Choice

A company decides to close down its plastics division. It has on hand 20 tonnes of styrene monomer, a raw material that has a market price of $700 per tonne, which had been originally purchased at $650 per tonne. Given that the company has no use for the styrene monomer, and that it would cost the company $5000 to store it, what is the value of the 20 tonnes of styrene monomer to the company?

• A) -$5000
• B) $13,000
• C) $0
• D) $14,000

Know the classification and reporting of investments on the balance sheet.

Understand the accounting for dividends and interest related to investments.

Recognize the treatment of gains and losses on investments and their impact on financial statements.

Identify the characteristics and reporting requirements for different types of securities.

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Definitions:

Notochords

A flexible rod-shaped structure that provides support in all embryonic and some adult chordate animals.

Vertebrae

(vertebrae) (sing., vertebra) The bones that make up the spine.

Hagfishes

Jawless marine fishes belonging to the class Myxini, known for their ability to produce slime as a defense mechanism.

Respiration

The biological process involving the exchange of gases between an organism and its environment, crucial for cellular energy production through the intake of oxygen and release of carbon dioxide.